Britain's minimum wage to rise nearly 4%, Times reports

What happened

Britain's finance minister John Healey will announce plans to raise the minimum wage by nearly 4%, the Times reported. The National Living Wage for workers aged 21 and over is expected to rise to about £13.20 an hour from £12.71.

Confirmed

Global impact / market context

A higher minimum wage raises wage costs for employers, which can squeeze profit per sale at businesses that rely on lower-paid staff. It also puts more cash in workers' pockets, supporting spending, while younger-worker rates rising in line could affect youth hiring.

Analyst inference

Britain's minimum wage is already one of the highest among advanced economies as a share of median earnings. The reported rise goes beyond the Low Pay Commission's 3.7% estimate for 2027, signalling faster wage growth that could keep cost pressure on labour-heavy companies.

Analyst inference

What to watch

1. The finance ministry declined to comment on the Times report, so the figures remain unconfirmed until Wednesday's budget announcement, when the actual rates and timing will be set out officially. Confirmed
2. If confirmed, the increases would take effect in 2027 and end a recent trend in which the minimum rate for younger workers rose by more than the rate for older workers. Proposed
3. Watch whether employers cite the higher wage bill as a reason to slow hiring or raise prices, and whether youth unemployment, which some analysts link to younger-worker rates, responds. Analyst inference

Evidence

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